Wickes restores payout and confirms recovery

WICKES, the do-it-yourself and timber retailer, yesterday confirmed its recovery from the brink of collapse when it declared its first dividend payment for three years. Investors showed their appreciation by marking the shares up 6p to 121p, writes Heather Connon.

The 0.2p interim dividend is being paid despite a pounds 2.5m drop in pre-tax profits to pounds 4.1m for the six months to June. The drop was due to the absence of a gain on convertible loan notes, which added pounds 5.1m to profits in the previous period. At the operating level, profits were 6.8 per cent ahead at pounds 10m. Earnings per share were 1p compared with 2.1p last time - or 0.3p excluding the loan stock gain.

The timber businesses Hunter and Malden, which were acquired just as the DIY market peaked in 1988, are still making losses - pounds 3.8m and pounds 2.8m respectively. The group is experimenting with two new formats for Malden: Builders Mate, a joinery and builders' merchant business; and Malden Joinery. Henry Sweetbaum, chairman, said the results for Builders Mate, which now has 18 outlets, were encouraging but it was too early to assess the results for Malden Joinery.

Hunter, however, was 'coming through very nicely'. It increased sales by 9 per cent in the period although margins were depressed by higher import prices. Operating profits at the Wickes British stores were up 17 per cent at pounds 8.3m.

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